Businesses both large and small fight for survival every day. Yet, government bureaucrats and elected officials often like stepping in to make running a business harder. Throw in a little trendy populism, and running a business becomes a terrifying task in the current climate, bordering on impossible.
Take Facebook and Google, for instance. These businesses are competing for users every day, and their competitors are just waiting for them to slip up. If even that wasn’t hard enough, new platforms are being developed every day by innovators that now have the advantage of seeing how Facebook and Google have succeeded. Of course, this competition is good: good for the companies, good for the users, and good for the economy.
What isn’t good is the government making this competition even harder.
Yet, over the past several years, politicians both right and left keep stepping in to say how these companies should provide their product, what products they should offer, and even how they should run their businesses. This is ill-advised: Aging senators are the last people who should determine the business models of tech companies.
However, it isn’t just the tech titans that face this type of scrutiny and micromanaging by our overly involved government officials.
On June 9, 2019, Raytheon Company and United Technologies Corporation announced their plan to combine forces as Raytheon Technologies. They are still attempting today to navigate the bureaucratic labyrinth of this merger. And, unsurprisingly, cronies have stepped in to criticize the merger in a desperate attempt to maintain market share and restrict competition. It doesn’t stop there, either. Hedge funds and other short-term investors have begun spreading allegations of anti-trust violations and general criticisms of the deal in an effort to distort the market.
For instance, after the merger was announced in June, some investors in United Technologies vocally criticized the potential deal as bad for shareholders.
It’s a free country, so they should, of course, be allowed to voice their thoughts. However, using delay tactics to benefit from a clumsy and confused government response is a common tactic of activist shareholders who are looking out for their financial longevity. Such underhanded tactics should be acknowledged for what they are: cronyism.
Mergers are essential to American competitiveness, and an argument can be made that they are especially important in the defense and aerospace industry.
Putting short-term profits over the long-term value of consolidating corporate capabilities is detrimental to both American wallets and American safety. Mergers allow technological innovations, economies of scale, and manufacturing advancements. The Raytheon and United Technologies merger will prove beneficial to shareholders, our national security, and the global marketplace.
While this merger is likely to go through, the point is that it should go through faster.
In fact, it should have been completed last year. Mergers are common and important. And, while the Raytheon/United Technologies merger continues to drag along under this burdensome process, other countries such as Russia and China continue to improve their defenses. China has increased its share of global research and development spending from 4.9% to 25.1%, and in 2017, Russia became the second-largest arms producer. If things don’t change soon, we will eventually fall behind our rivals.
Remember: The government doesn’t create jobs. It doesn’t create new products. If anything, the government slows down the creation of jobs and new products. Instead of listening to cronies and innovating new ways to slow down business transactions, the government should get out of the way — and let the professionals do what they need to do.
Charles Sauer (@CharlesSauer) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is president of the Market Institute and previously worked on Capitol Hill, for a governor, and for an academic think tank.
